Thank you.
I'm the general manager for a steel company in Dartmouth, Nova Scotia. We build bridges and buildings. The company has been in business for 40-odd years. Back in the mid-1990s we started doing work in the U.S., primarily in the New England, New York, New Jersey area. With the Canadian dollar at 63¢ back in those days, it was quite easy to get work and we became quite successful working down there. Within a few short years, 50% to 70% of our business was in the U.S., building major buildings, high-rise buildings, major bridges, and things of that nature. Of our total sales per year for the last, say, ten years, we were doing $50 million to $60 million in sales, and probably $30 million to $40 million was U.S. sales.
As the U.S. dollar migrated back to par, that certainly changed the ball game, because being on the east coast, one of our disadvantages is location. We are a little off the beaten track, so we have to move goods back and forth to the market. As the dollar approached par it became even more difficult. We still managed to secure work and kept reasonably busy. In 2008, with the U.S. economy taking the major turn that it took, the competitiveness of U.S. manufacturers, the status of the dollar, and the “Buy America” situation kind of put an end to our U.S. work, at least for the short term.
“Buy America” related to us in the manufacturing business, where the federal government was putting money into state projects. Traditionally we could do state projects because they weren't federally funded, since a lot of the state projects, the bridges and buildings that we were building, if they were state funded might have been funded through tolls or other means. Once the Buy America and stimulus package came in, a lot more money went from federal projects to state projects, and the conditions were under the Buy America clause, in that any funding was now under the Buy America clause, even some of the state projects we were doing, so essentially we were shut out of that market for the past year and a half.
With their stimulus package, I know they spent a bunch of money in the past year and a half, but a lot of the work they've been doing down there is really the shovel-ready stuff, which is really paving, painting, and things like that. It's not the major projects. With the big projects, the kind of stuff we do, it can take a year or two to design these things, so the work that's attractive to us is really yet to come. I think there's still another $20 billion worth of work they plan on doing in the next couple of years as part of the stimulus package. With the changes to the Buy America clause, I think that will certainly be a positive thing for us as we look down the road.
As it stands right now, the U.S. economy, from what we see as far as the markets we're working into, is still really not in very good shape. Our American competitors are very competitive. They're working and bidding projects just to survive. So it's a very competitive marketplace out there, at least until the economy starts to improve on their side. Also, the Canadian dollar being close to par is really not helping us much. So we've been kind of buoying our situation with more domestic work in Canada and being a little more aggressive in Canada. We're still holding our own and doing okay, but we're certainly looking forward to the day that the U.S. economy starts to percolate and improve, and hopefully we'll get back to doing more work down there.
Thank you.